Science and Innovation Minister Steven Joyce is defending a decision by Callaghan Innovation to turn down a multi-million-dollar contract.
The Crown entity has stopped its subsidiary, KiwiStar, from signing a $2.4 million contract with the Australian Astronomical Observatory to develop telescope lenses.
The Labour Party has criticised the decision, saying it is detrimental to science development in New Zealand.
However, Mr Joyce says the contract did not fit with Callaghan's focus and that, combined with uncertainties over the future ownership of the company, informed Callaghan's decision.
